Projects are the best way for organizations to meet goals and get work done. But projects need parameters and guidelines, or else things can get overlooked or delayed, resulting in project failure and eventually hurting the organization.
Many professionals turn to Six Sigma to improve their business processes, and the initial phase of this technique is the Six Sigma project charter. This article explores the project charter in Six Sigma, including a definition, how to start one, and the various parts of the charter.
We start our journey with a simple definition.
What is a Project Charter in Six Sigma?
A project charter in Six Sigma is the first step in the Six Sigma DMAIC methodology. DMAIC is short for Define, Measure, Analyze, Improve, and Control. The Six Sigma project charter fulfills the first part of the process, the project’s definition.
A Six Sigma project charter is a living document, a contract between a project’s sponsor and the project team. The charter functions as a project’s detailed road map, a statement clearly defining the issue the project will address, who participates in the process, the intended result, and the project’s deadlines. In addition, the charter deals with detailed certainties and offers strong guidance, thereby keeping team members on track.
The document also clarifies what problems will not be addressed. This clarification helps avoid unrealistic expectations and keeps the scope focused on the issue.
Additionally, there are enough similarities between Six Sigma and Lean Six Sigma that the charter and its definition apply equally well to a Lean Six Sigma project charter.
In summary, the project charter:
1) Clarifies the sponsor’s expectations of the project team
2) Keeps the project team focused
3) Ensures the team stays aligned with process priorities
What Does “Living Document” Mean?
A living document, also known as a dynamic or evergreen document, is a document that continually changes over time, accumulating edits and updates during its lifespan. Just as living creatures adapt and grow, a living document evolves to suit the ever-changing conditions and issues surrounding the project.
So this means that although the Six Sigma project charter is created during the first step of the DMAIC methodology, the document will be susceptible to changes and tweaks.
Now, let’s look at the characteristics of a project charter in Six Sigma and, by extension, what makes up a Lean Six Sigma project charter.
The Essential Project Charter Areas
The typical Six Sigma project charter template should contain the following three elements:
1) Measurable or quantifiable goals and objectives the team must achieve
2) The project’s scope or organizational and operational boundaries
3) The commitment and support of top management
The charter is typically broken down into seven steps.
1) Business Case. The business case explains the reason why the project exists. In addition, the business case defines the project’s quantifiable benefit and how it meshes with the business strategy or goals found in the Lean Six Sigma project charter. The case also identifies the funds that will be saved, and it describes how the project aligns with the organization’s business strategies.
2) Problem or Opportunity Statement. The second step is known as both a problem statement and an opportunity statement. The reason is that a problem statement in the Six Sigma project charter can mean a business problem or pain, while an opportunity statement describes an improvement opportunity. And yes, these can overlap.
The problem statement typically follows the SMART guide found in Lean Six Sigma, which stands for Specific, Measurable, Achievable, Relevant, and Time-Bound. Additionally, the statement must answer three key questions:
a) What’s wrong?
b) Where is the problem appearing?
c) What’s the problem’s scope (e.g., size, criticality, magnitude)?
3) Goals or Projected Benefits. The third step quantifies the benefits and goals. What is the project trying to accomplish? For example, it could reduce turnaround time or eliminate redundancies.
4) Goal Statement. The goal statement needs to explain how the team will achieve the goal. It defines what success looks like when the group meets its goals. This step describes the team’s approach but doesn’t offer the solution. This step includes:
a) What’s to be accomplished when the project is successfully carried out
b) A measurable target for the sought-after result
c) The goal’s projected completion date
5) Project Scope. This step describes the boundary conditions and calls out the key parameters that are covered (and even not covered) by the project. The scope covers the project’s physical boundaries and includes departments, product families, geographical areas, and more.
6) Project Plan. Now get to the real meat of the project. The project plan answers the central questions of “Who, What, Where, When, How, and even How much.” This phase typically includes a chart detailing the project’s major milestones. The chart often begins with the DMAIC phase. But the chart is just the beginning; the team must follow it up with a more detailed project plan, covering the project’s necessary: People, Facilities, Equipment, and Materials. Next, the plan shows project activities, including a schedule showing estimated times when each activity will start and what resources are needed to finish each task. Additionally, a project charter for Six Sigma is expected to change over time (remember, it’s a living document) as additional project information becomes available.
7) Team Structure. Finally, we get to the final step of the Six Sigma project charter, the human resources. Team structure lists the project managers, project team members, and leaders involved in the project. The structure also includes the project’s sponsor, key stakeholders, and subject matter experts. Consider this stage to be the “cast of characters.”
Note:Applying Six Sigma methodologies in logistics can help organizations optimize supply chain processes, improve customer satisfaction, and reduce operational costs.
How Do You Start Your Project Charter in Six Sigma?
Now that we know what goes into a project charter for Six Sigma, how do we start one? Don’t let the extensive scope of the charter intimidate you; it’s not as Herculean a task as it may initially appear. You create a project charter by identifying the issue or problem, then gaining a complete understanding of it.
People typically deal with issues that arise from a flawed process, solving the problems but keeping the bad process intact. To put it in medical terms, many people typically focus on addressing the disease’s symptoms instead of what’s making the patient sick in the first place!
In today’s business world, smart teams employ Six Sigma’s DMAIC methodology, beginning with the project charter, which can only exist once the problems are quantified and understood.
The Importance of the Process
Businesses consist of a collection of resources (people, materials) that operate by various processes. When dealing with the Six Sigma methodology, you must identify the process that requires attention and justify the time it takes to improve it. So, what process is broken, and why is it worth fixing?
Next, your team and other affected parties need to meet and discuss how the process is broken. Once these elements have been quantified and recorded, the team can create a solid project charter.
The Project’s Timeframe
When planning something like a Six Sigma project charter, it’s easy to let well-meaning ambition override reality. Only some good ideas need to be incorporated, and not every nice-sounding goal needs to be included; after all, there are only so many hours in a day.
The fact that we have limited time should encourage teams to bind the project with a start and stop point. Teams should assemble a timeline that shows crucial milestones and when they are projected to be completed. The appropriate team members should create a timeline with Six Sigma’s DMAIC methodology in mind. How long does the team expect each part of DMAIC to be completed?
Project Charter Six Sigma: Finding the Right Scope
The project’s scope covers the resources and boundaries of the improvement efforts. In addition, the scope details elements such as geographies, departments, products, customers, and the process’s start and stop points. A project with an ill-defined scope is subject to scope creep, which can stall the project indefinitely. Scope creep refers to changes, or continuous or uncontrolled growth in the project’s scope, once the project begins. Creep usually arises from internal disagreement or miscommunication or when the main stakeholders change requirements.
Therefore, the project team must define the scope, set limits and boundaries, take stock of what resources are available (including time!), and agree on the desired result.
Also Read: Ultimate Guide to Six Sigma Control Charts
Do You Want to Learn More About Six Sigma?
Six Sigma offers today’s organizations a better way to resolve their issues, so it follows that there’s a need for professionals who understand the methodology. If this interests you, Simplilearn, in collaboration with the University of Massachusetts, offers a Six Sigma online training post graduate program that will bring you up to speed with Six Sigma.
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All courses are aligned with IASSC-Lean Six Sigma and include real-world case studies and a capstone project that gives you the real-world experience needed to master Six Sigma confidently. In addition, graduates gain their certificate and a membership offer in the prestigious UMass Amherst Alumni Association.
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